Budget delivers huge boost to SME investment – MYOB

Small business package will encourage more business starts and
existing business to invest

BUT it has missed the opportunity to scrap obscure taxes and
arduous reporting and has added complexity

Big taxing, big spending budget leaves hard work to be done in
future years

Small business will react strongly and positively to the $20,000
immediate asset write-off announced in tonight’s budget, according to
MYOB CEO Tim Reed. MYOB has over 1 million SME businesses in Australia.

“There’s no doubt there are changes built in to benefit small
business. This is the first budget in 10 years that has put small
businesses where they belong – at the front and centre of government
policy. The government has two weapons at its disposal – to reduce the
taxes small businesses pay and to make it easier to run a business.

“The government has done outstanding work on the first, but
unfortunately running a small business will still involve long,
frustrating nights for owners as the additional reporting and red tape
kicks in. We’d now like to see more work to make it simpler to run a
business.” said Mr Reed.

Mr Reed provided the following commentary on Budget measures:

“The 1.5% cut to company tax for small business (and equivalent
concessions for non-incorporated businesses) is good as it will
encourage more people to start a business but does so by adding
complexity to an already confusing system. We’d prefer to see a lower,
across the board, company tax rate.

“We’re giving two thumbs up to changes to employee shares schemes.
It gives innovators “permission to play” by making it easier to
attract great talent. Importantly, this levels the playing field
between Australia and other countries when it comes to having great
talent join the team when starting a business,” said Mr Reed.

“The $20,000 accelerated/increased depreciation allowance for small
business is simply great news for people who want to back themselves.
This move will stimulate small business investment, bring forward
planned hires and drive an increase in productivity.

“However we’re concerned about how changes to GST entry thresholds
will be implemented. This attempt to simplify could mean businesses
are moving in and out of different classifications, which can get very
complicated in terms of reporting.

“SMEs will welcome additional infrastructure investment. The fact is
that SMEs live in their local economy – they are the last leg in the
delivery chain. Most are burdened by creaking transport
infrastructure, wasting valuable time sitting in traffic. Improvements
to our transport system will be welcomed by the sector.

Missed opportunities to help small business

“The Government has missed an opportunity to lop a particularly
nasty piece of red tape – the requirement for coding GST-free
transactions into one of eight categories. If we took a simpler
approach, as they do in New Zealand, it would more than halve the time
it takes small business to complete GST reporting, and slash the $13.7
billion time cost to business that we estimate.

“We’d question whether this was opportunity to scrap some of the
many obscure Federal taxes to create an environment more attractive
and conducive to doing business. SMEs are saying ‘bring it on’ when it
comes to tax reform, and we’re right there with them.

“If our small business sector is to flourish, we can’t shy away from
taxation reform. With the taxation review well underway, the
government needs to lead the way in creating a simpler, more effective
taxation system. The current system is stifling business and must change.

Looking forward

“We’re hopeful consumers respond well to this budget and keep
spending. The small business sector relies on the discretionary
section of the customer wallet. If consumer confidence falls, they’ll
still pay the mortgage and the bills, but reign in discretionary
spend. We are worried, however, that this budget is a big taxing, big
spending budget – which means in time more work will need to be done
to reign in both spending and taxes.

For MYOB product information, research results, business tips,
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About MYOB

Established in 1991, MYOB is Australia’s leading accounting software
provider. It makes life easier for approx. 1.2 million businesses
across Australia and New Zealand by simplifying accounting, payroll,
tax, CRM, websites, job costing, practice management, inventory,
mobile payments and more. MYOB also provides ongoing client support
via many channels including a network of over 40,000 accountants,
bookkeepers and other consultants. It is committed to ongoing
innovation, particularly in cloud computing solutions, and spends more
than AU$35 million annually on research and development. For more
information, visit myob.com.au.